Electric Co-ops Warn EPA about Impact of Removing Coal from Fuel Mix at Hearing

February 7, 2014

John Novak, Executive Director of Environmental Issues at the National Rural Electric Cooperative Association (NRECA) testified before the Environmental Protection Agency (EPA) on the Standards of Performance for Greenhouse Gas Emissions for New Stationary Sources: Electric Utility Generating Units.

Speaking on behalf of the more than 900 not-for-profit, member-owned electric cooperatives, Novak warned the Agency about the impact of effectively removing coal as a hedge against the volatility of gas and wholesale market prices. Electric cooperatives serve 93 percent of the 'persistent poverty counties,' as shown in the map at http://bit.ly/LTDR3y, and co-ops remain concerned about the effect of this new rule on their members' electric bills, especially low or fixed income. Additionally, as referenced below and demonstrated at http://bit.ly/1iwIOtT, natural gas pipelines do not serve all regions of the country.

The following is an excerpt from Novak's testimony.

As demonstrated by cold snaps just this winter, natural gas prices are volatile and spike even during shorter-term weather events. This has an immediate adverse effect on consumer electric bills. Coal, and its stable price is a long-term proven hedge against natural gas volatility and is critical if we are to continue to provide affordable electricity for our members.

While new, unconventional natural gas supply from shale has played a huge role in lowering natural gas prices, even this increased gas supply has not changed the built-in volatility of natural gas. This is because price volatility is correlated with business cycles, weather extremes, and pipeline infrastructure issues. Again, we are experiencing this with the 2014 winter weather across much of the nation'

There are many areas of the country that either 1) have insufficient access to natural gas 2) do not have suitable sites for CO2 storage or enhanced oil recovery sites, or 3) cannot be supplied wholesale power reliably through the existing transmission grid. How will the EPA reconcile elimination of new coal-fired capacity in these situations?

Clean Air Act precedent is that the best system of emission reduction is based on data from existing plants in the US and worldwide as appropriate. In view of existing performance and what can be reasonably anticipated, we think the best system is defined by improvements in thermal efficiency, an option that EPA has considered and rejected in this proposal'

We think this proposal will be a setback for CO2 capture research, development and demonstration. If, as even the EPA suggests, no coal plants are being built, there will be even less support from the private sector for continued investment in the expensive and unproven CO2 capture development. And, consequently, CO2 capture won't be available to use fossil fuels as energy in a carbon constrained future neither in the US nor around the world.

The National Rural Electric Cooperative Association is the national service organization that represents the nation's more than 900 private, not-for-profit, consumer-owned electric cooperatives, which provide service to 42 million people in 47 states.

For more information:

National Rural Electric Cooperative Association

4301 Wilson Blvd
Arlington, Virginia
United States, 22203
Tel: 703-907-5500

Tracy Warren
Tel: 703-907-5746
E-mail: tracy.warren@nreca.coop

Link http://www.electricenergyonline.com/detail_news.php?ID=469680
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